Horizon Handout November 2022

Capital Market Outlook of Berenberg Wealth & Asset Management - compact outlook on capital markets, economy, equities, bonds, economics and currencies.


  • Inflationary pressures remain high and Europe is mired in the energy crisis. Consumers are unsettled ahead of winter.
  • The risks and stress factors are leading into recession, even if labour markets are still robust.
  • Central banks must continue to tighten monetary policy, even if the economy is slowing down.


  • Negative earnings revisions continued during the Q3 reporting season, in line with the economic slowdown.
  • Higher risks in Europe are accompanied by lower valuation metrics. Europe offers catch-up potential.
  • Low investor positioning should limit downside potential. Further bear market rally seems possible in the short term.


  • Safe government bond yields rise to new highs for the year. US yield curve remains inverted.
  • Rise in risk premiums for corporate bonds continues. Emerging market bonds with spread widening.
  • We are underweight bonds and remain cautiously positioned on credit risk. Duration: less short than before.

Alternative investments / commodities

  • OPEC+ cuts production, US releases more reserves. Supply remains tight in the medium term and oil price thus well supported.
  • Gold burdened by high real rates. Fed pivot necessary for upward trend. Diversification effect currently limited.
  • Industrial metals burdened by demand risks in the short term, but supply also weakens. Supercycle remains intact.


  • Euro remains under pressure. Uncertainty about the economic consequences of the energy crisis is weighing on it.
  • ECB is now on a tightening course. In addition to rate hikes, balance sheet reduction is gradually coming into focus.
  • Despite the ECB's tightening course, the euro remains below parity against the US dollar and the Swiss franc.